Christopher & Banks considers sale or bankruptcy as sales continue to fall
Plymouth, Minnesota-based womenswear retailer Christopher & Banks Corporation revealed on Thursday that it is considering strategic alternatives, including a possible sale or bankruptcy, as the Covid-19 pandemic continues to take its toll on the company’s sales.
The retailer announced that, in the third quarter ended October 31, 2020, its net sales decreased 22.6 % to $72.8 million, down from $94.1 million in the same period in the previous year. This decline primarily reflected falling retail store sales, partially offset by a 32.4% increase in e-commerce sales.
The company’s net loss for the quarter totaled $10.8 million, a loss of $0.29 per diluted share, compared to net income of $487,000, or $0.01 per diluted share, in the prior-year period.
“We have not seen the level of sales recovery that we had anticipated,” commented Christopher & Banks president and CEO Keri Jones in a release.
“We believe that Covid has had an outsized impact on our customer demographic as her shopping behavior is more pragmatic with limited demand for new outfits in the absence of social engagements,” she explained. “In addition, based on our own retail traffic trends we believe she remains hesitant to shop in stores.”
In light of the continued downturn in its sales, Christopher & Banks, whose offering largely focuses on women over 40, has engaged strategic advisors, including B. Riley Securities Inc., to assist it as it considers its options for the future.
As well as a sale of the company or its assets, and bankruptcy, the retailer is also pondering further lease concessions and deferrals, reductions in operating and capital expenditures, and a refinancing of its the debt, among other alternatives.
Christopher & Banks said that it does not intend to disclose further details or developments about this process until its board of directors has approved a specific course of action.
Year to date, the company’s net sales were $171.4 million, falling 34.3% from $260.7 million in the same period in the previous year. Net loss was $43.1 million, or $1.14 per diluted share, compared to a net loss of $11.6 million, or $0.31 per diluted share, last year.
Due to ongoing uncertainty resulting from the Covid-19 pandemic, the company has not provided financial guidance for the fourth quarter or the full fiscal year.
Christopher & Banks currently operates 450 stores in 44 states, including 315 MPW locations, 76 outlet stores, 31 Christopher & Banks locations, and 28 CJ Banks stores specializing in plus-size fashion.
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